Long Island Man Is Said to Have Connected Investor to Scuttled Musical

A Long Island man with a history of civil fraud complaints against him, and who filed for personal bankruptcy in 2011 with $15 million in debts, steered the lead producer of the now-scuttled Broadway musical “Rebecca” to a mysterious investor whose recent death from malaria set the stage for the collapse of the musical, according to a person who learned about the middleman from the producer, Ben Sprecher.

The man, Mark C. Hotton of West Islip, N.Y., has been sued for fraud in federal court in New York and Florida in recent years, with plaintiffs alleging that Mr. Hotton and his wife, Sherri, have hoodwinked investors by inflating account balances of their businesses and diverting payments for the Hottons’ own benefit.

In one of the cases, according to court papers, Mr. Hotton was accused of running “a Ponzi scheme” in which he recruited people to invest in securities and guaranteed at least a return on principal, then used the money to pay off other investors. The case was closed last year pending the outcome of a related arbitration proceeding.

In another fraud case filed against Mr. Hotton in State Supreme Court in Manhattan, Justice Judith J. Gische wrote that “Mark C. Hotton is a savvy businessman and his defenses show at best, poor judgment, and at worst, admissions of criminal conduct.” The outcome of that case, based on court records, was unclear.

As for “Rebecca,” Mr. Hotton first met the show’s producer, Mr. Sprecher, last winter at a time when news reports described Mr. Sprecher’s difficulties raising money for the $12 million budget to stage the musical on Broadway, according to the person who provided information about Mr. Hotton. The person spoke on condition of anonymity, citing a continuing criminal investigation into the collapse of “Rebecca” by the United States attorney’s office and the Federal Bureau of Investigation.

Mr. Hotton connected Mr. Sprecher to Paul Abrams, whom Mr. Sprecher described in an interview last month as a wealthy South African businessman with offices in Johannesburg and London. Mr. Sprecher has said he never met or spoke on the phone to Mr. Abrams, however; Mr. Abrams signed investment papers for “Rebecca” in February, listing an Australian address and phone number, and pledged to provide $2 million for the show and raise another $2.5 million from three other people.

Then, in September, Mr. Sprecher announced the death of a major investor — whom he would later identify as Mr. Abrams — and said the show was in limbo unless he was able to replace the $4.5 million. Mr. Sprecher said that this week he came close, but that a new major investor — who was going to put $2 million in the show — was scared off by an anonymous e-mail that outlined the show’s troubled history and derided Mr. Sprecher.

Mr. Hotton and his wife could not be reached for comment on Tuesday night at any of the phone numbers listed for them in court documents and other public records.

However, Mr. Hotton’s lawyer in the bankruptcy proceedings, Heath Berger, said in an interview on Tuesday night that he had no information about his client being involved with Mr. Sprecher or the “Rebecca” musical. Mr. Berger declined to discuss the previous fraud charges against Mr. Hotton, confirming only that Mr. Hotton was a longtime businessman whose bankruptcy case was pending in federal court for the Eastern District of New York. (According to lawyers in the cases against Mr. Hotton, he was a stockbroker and was affiliated with several electrical contracting companies.)

According to his bankruptcy filing, Mr. Hotton owed more than $1 million in loans on four different boats; $235,000 to American Express; and several millions of dollars in business-related debts and mediated settlements.

Mr. Hotton did not respond on Tuesday night for a request for comment that Mr. Berger said he would pass along.

Federal authorities interviewed Mr. Sprecher last week about Mr. Abrams and others aspects of “Rebecca,” and Mr. Sprecher also shared information with the authorities about Mr. Hotton, according to the person who spoke on condition of anonymity. No one has been able to confirm the existence or death of Mr. Abrams, meanwhile, and even some associates of Mr. Sprecher question whether Mr. Abrams existed.

Mr. Sprecher did not respond Tuesday night to a request for comment about his relationship with Mr. Hotton.

The United States attorney’s office and the F.B.I. declined to comment on Tuesday night.

Jack Styczynski contributed research.

A version of this article appears in print on October 3, 2012, on page A25 of the New York edition with the headline: L.I. Man Is Said to Have Connected Investor to Scuttled Musical. Order Reprints|Today's Paper|Subscribe